S.F. 430 Section 1. NEW SECTION . 507B.4D Medical malpractice policy 1 limit —— insurer liability. 2 1. An insurance company insuring a health care provider, 3 as defined in section 135P.1, against professional negligence 4 shall at all times negotiate in good faith all claims presented 5 to the provider. If a claimant offers to settle a claim 6 within the professional negligence insurance policy coverage 7 limits and the insurance company refuses or declines the 8 offer and the claim proceeds to judgment in excess of the 9 insurance policy coverage limits, the insurance company shall 10 be liable for the full amount of the judgment regardless 11 of the existing insurance policy coverage limitation. The 12 insurance company has a duty to negotiate a settlement within 13 the policy limits if an offer is made by a claimant at or 14 within the policy limits. If the insurance company does not 15 do so, the health care provider shall have a cause of action 16 against the insurance company for the failure to negotiate a 17 settlement within the policy limits. The damages shall include 18 the recovery of all costs the health care provider incurs and 19 reasonable attorney fees. 20 EXPLANATION 21 The inclusion of this explanation does not constitute agreement with 22 the explanation’s substance by the members of the general assembly. 23 This bill provides that an insurance company insuring a 24 health care provider against professional negligence shall 25 negotiate in good faith all claims presented to the provider. 26 If a claimant offers to settle within the policy limits and the 27 insurer refuses or declines the offer and the claim proceeds to 28 judgment in excess of the policy limit, the insurance company 29 is liable for the full amount regardless of policy limitation. 30 The insurance company has a duty to negotiate a settlement 31 within policy limits if an offer has been made by the claimant 32 at or within the policy limits. If the insurance company 33 fails to do so, the health care provider has a cause of action 34 against the insurance company. 35 -1- LSB 2328XS (2) 90 cm/ns 1/ 1